BAIJNATH v. ZILA SAHAKARI KENDRIYA BANK, MARYADIT, DHAR
1989-02-01
A.G.QURESHI, S.K.DUBEY
body1989
DigiLaw.ai
S. K. DUBEY, J. ( 1 ) BY this petition under Article 226 of the Constitution of India, the petitioner has challenged the order of his compulsory retirement (Annexuref) dated 23-8-1988 passed under Rule 72 of the Madbya pradesh Jila Sahakari Kendriya Bank Karamchari Sewa (Niyojan, Nibandhan tatha Karyasthiti) Niyam, 1982 (hereinafter referred to as "the Service rules" ). ( 2 ) IT is not disputed that the Service Rules are statutory Service Rules framed by the Registrar, Co-operative Societies, Madhya Pradesh, in exercise of powers conferred under Section 55 (1) of the M. P. Co-operative societies Act, 1960 (hereinafter referred to as "the Act" ). The petitioner's case, in brief, is that he was appointed as a driver on 20th November, 1964. By an order dated 17-4-1985 (Annexure B), the petitioner was demoted from the post of Driver to the post of Peon. The petitioner raised a dispute about his demotion, under the provisions of the Industrial Disputes Act, 1947 and the conciliation proceedings were pending. During the pendency of the conciliation proceedings, the Registrar, Co-operative Societies, passed an order under Section 49-A (2) of the Act anulling the order of demotion. Hence, the conciliation proceedings were dropped. Because of this the respondents were annoyed with the petitioner and they, anyhow, wanted to get rid of the petitioner. Hence, the impugned order Annexure F was passed under rule 72 of the Service Rules compulsorily retiring the petitioner, stating in the impugned order that the petitioner has completed 25 years of service ; hence, in view of the exercise of powers and in the interest of the Bank after giving three months' wages in lieu of three months' notice, the petitioner was retired from service. It is this order, the petitioner has challenged on mala fides and also on the ground that the petitioner has not yet completed 25 years of service and further in retiring the petitioner, there was an abuse of the power under Rule 72 of the Service Rules and the retirement was not because, it was in the interest of the respondent Bank. ( 3 ) THE respondents, in their return, have contended that the petitioner was retired in the interest of the Bank as the petitioner entered in the Bank's service on 15-12-1962. Copies of the appointment order and the joining report have been annexed as Annexures R-2 and R-3.
( 3 ) THE respondents, in their return, have contended that the petitioner was retired in the interest of the Bank as the petitioner entered in the Bank's service on 15-12-1962. Copies of the appointment order and the joining report have been annexed as Annexures R-2 and R-3. The respondents contended that because of the audit report and objection that there were 6 drivers on 4 vehicles, out of which one vehicle was auctioned in September, 1988, with a view to minimise the management expenses, after consideration of the audit report, in the interest of the Bank, it was thought fit to retire. the petitioner. The respondent Bank has power to retire an employee under rule 72 of the Service Rules, without assigning any reason, after his completion of either 55 years of age or 25 years of service, after giving 3 months' notice or 3 months' pay and allowances in lieu of the notice period. Rule 72 of the Service Rules is not challengeable before the High Court. It was contended by the respondents that as there is no statutory violation of any statutory rules, the respondent Bank, which is a Co-operative Society under the Act, being not a statutory body or an authority under Article 12 of the constitution of India, no writ is maintainable against the respondent Bank and the retirement cannot be challenged. It was also contended by the respondents in their return that as there is an alternative and efficacious remedy available to the petitioner to raise a dispute before the Registrar of co-operative Societies under Section 55 of the Act, the petitioner ought to have availed of the remedy provided under the Act available to the petitioner. ( 4 ) ON the facts stated above and the contentions raised in the return, as regards the length of service, we are not inclined to hold that the petitioner has not completed 25 years of service in view of Annexures R-2 and r-3 The important question for consideration in this petition is whether the respondent-Society is amenable to the writ jurisdiction of this Court and whether, in the facts of the case, can the order of compulsory retirement passed in exercise of the powers under Rule 72 of the Service Rules be challenged.
We agree with the learned counsel Shri U. M. Neemgaonkar, for the respondents, that a writ under Article 226 of the Constitution of india cannot be issued against a Society as the Society is not a statutory body and is not an authority under Article 12 of the Constitution of India ; but such Societies are amenable to the writ jurisdiction of the High Court if it is shown that the Society has acted in breach or violation of any statutory provisions or an existing legal right has been violated in breach of any statutory provisions requiring the Society to act in a particular manner in passing an order against a person, who approached the Court under Article 226 of the Constitution of India for seeking a writ of mandamus commanding compliance with the statutory requirements. Similarly, an order passed against an employee of the Society affecting his services can also be quasbe d in ease it is shown that the order has been passed in contravention of any provision or rule and before passing the order, the Society has failed to perform its legal obligatioas, as required under the Act or the Service rules. If it is shown, then it can be declared that the order so passed is invalid, ineffective and cannot be enforced [see the decisions of this Court in rameshwar Ramnarayan v. M. P. Co-operative Marketing Federation Limited and others, [1976 MPLJ 377] ; Anil Kumar Ojha v. Appellate Authority, district Co-operative Land Development Bank Limited, AIR 1984 MP 123 and Chandra Sharma v. State of M. P. , 1984 MP WN, Note No. 323]. Therefore, keeping in mind the above decisions, the impugned order has to be judged. ( 5 ) SHRI V S. Kokje, learned counsel for the petitioner, contended that the power conferred by Rule 72 of the Service Rules cannot be exercised in an arbitrary manner unless in the opinion of the Society, it is in the interest of the Society-Bank to compulsorily retire the petitioner from service and such material ought to have been placed before the Court.
If there is no material or the order is based on extraneous grounds and it is found (hat there was really no justification for passing an order of compulsory retirement in the Bank's interest, the order will be held to be in contravention of Rule 72 of the Service Rules and will be liable to be quashed. Learned counsel for the Petitioner for this contention, placed reliance on the decisions of the Apex Court in $. C. Ganguly v. State of haryana, [ air 1987 SC 65 ] ; Brijmohan Singh Chopra v. State of Punjab [ air 1987 SC 948 ] and Smt. S. R. Venkatraman v. Union of India [ air 1979 sc 49 ]. Learned counsel also contended that power conferred under Rule 72 of the Service Rules is an unfettered power empowering a Society to compulsorily retire a person by giving three months' notice and as such, it is void under Section 23 of the Contract Act as being opposed to public policy and violative of Article 14 of the Constitution of India and also violative of the Directive Principles of State Policy contained in Articles 39 (a) and 41 of the Constitution of India. Reliance was placed on the case of the Apex Court in Central Inland Water Transport Corporation and another v. Brajonath Ganguli [ air 1986 SC 1571 ]. Shri Kokje further contended that a bare perusal of the audit report (Annexure R-5) shows that it relates to two other employees, who were taken in employment on 16-5-1984 and 12-5-1985 but instead of acting in accordance with the audit report, the respondent-Bank threw the sword on the petitioner. It was just because the petitioner took legal action challenging the order of his demotion. Therefore, malice is apparent. ( 6 ) THE vires of Rule 72 of the Service Rules cannot be considered in this petition because if the vires are to be considered, the petition will have to be sent to the Main Seat at Jabalpur and the parties have not made any prayer for this, and chose to advance their contentions on merits in the light of the provisions of Rule 72 of the Service Rules. Rule 72 reads as under: a bare reading of the above rule shows that a Bank can compulsorily retire an employee if he attains the age of 55 years or completes the service of 25 years.
Rule 72 reads as under: a bare reading of the above rule shows that a Bank can compulsorily retire an employee if he attains the age of 55 years or completes the service of 25 years. This power can be exercised by the Bank in the interest of the bank, without assigning any reason, after giving three months notice or three months' pay and allowances in lieu of the notice period. But this is not enough. When an order of compulsory retirement is challenged, then the Court is bound to consider whether this unfettered discretionary power has been exercised in the interest of the Bank or has been exercised for an unauthorised purpose and whether the employer, who is exercising this power, has acted in good faith or in bad faith. If it is found that the employer has not acted in good faith and has exercised the power arbitarily, discriminatorily and in breach of the duty conferred by the statutory provisions the order can be quashed in writ jurisdiction. As the case of the respondent-Bank is that the pjwer was exercised to minimise the expenses and because of an objection of the audit, as contained in Annexure R-5 the Audit objection, if considered, clearly states that the bank has got 4 vehicles, for which 6 drivers were employed. In the year 1984, there were only 4 drivers on four vehicles but on 16-5-1984, one Purushottam Maratba and on 12-5-1985 one Sirajuddin, were appointed as drivers by the bank so as to increase the number of drivers on four vehicles from 4 to 6 and the bank had paid on these two drivers till June 1987 Rs. 54,563-11 p. which is an extra expenditure and is realisable from the Board of the Bank. In the light of this audit objection, a note was prepared by the Bank (Annexure r-4) and instead of acting in accordance with the audit objection, a sword was inflicted on the petitioner. The petitioner, being the senior most, was made an scape goat and the rule "last come-first go" was violated. It is not the case of the respondent-Bank that the petitioner, because of his long service of 25 years, has become incapable of performing duties due to his advanced age or because of long service or he is inefficient, corrupt, dishonest, or dead-wood.
It is not the case of the respondent-Bank that the petitioner, because of his long service of 25 years, has become incapable of performing duties due to his advanced age or because of long service or he is inefficient, corrupt, dishonest, or dead-wood. In our opinion, the object of exercising the power in the interest of the Bank is to weed out inefficient, corrupt, dishonest and dead-wood persons from the service. ( 7 ) IN relation to compulsory retirement, as held by the Apex Court in the cases of Public Service, the Public interest means retention of honest and efficient employees and weeding out of inefficient and dishonest persons. The same analogy in the interest of the Bank can also be very well applied here. The words "interest of Bank" in relation to the employees employed in the Bank will, in our opinion, mean retention of honest and efficient employees in service and dispensing the service of those, who are inefficient, dead-wood, corrupt or dishonest. The rule does not empower the Bank to exercise this unfettered power to retire a person prematurely without any material against him in respect of efficiency, integrity and work. As the facts of the case have been placed before us by the parties, the case of the respondent is that because of the audit objection, the petitioner was compulsorily retired. The audit objection related to two other employees, namely Purushottam Maratha and Sirajuddin who were lately employed in the years 1984 and 1985 respectively. Therefore, if the Bank in fact wanted to act so as to minimise the management expenses on the basis of the audit report, the Bank could have very well taken action in accordance with law against the persons, against whom the auditors raised an objection. It is true that the power under Rute 72 of the Service Rules is absolute and there are no guidelines. Hence, when an attack is made to an order passed under Rule 72 ofthe Service Rules in exercise of the power, prematurely retiring a person from service, the matter has to be judged in the background of the facts. Even if the Bank was exercising the power under Rule 72 of the Service Rules, the Bank has no authority to discriminate in employment and cannot act arbitrarily and pick-and-choose the persons for exercising such power.
Even if the Bank was exercising the power under Rule 72 of the Service Rules, the Bank has no authority to discriminate in employment and cannot act arbitrarily and pick-and-choose the persons for exercising such power. According to the audit objection, two drivers were surplus, who were employed in the years 1984 and 1985 ; and according to the return filed by the respondent-Bank, out of 4 vehicles, one vehicle has been auctioned, then only three vehicles remained and, therefore, 3 drivers ought to have been retained in service. But having not been done so, the respondent-Bank prematurely retired the petitioner only without finding that the petitioner is incapable of performing his duties. Such a premature retirement in the background of the facts is nothing but a malafide exercise or misuse of the power for alien purpose or unauthorised purpose. Hence, in our opinion the respondent-Bank has not acted in good faith in exercising the power under Rule 72 of the Service Rules and has acted arbitrarily, discriminatorily and in violation of the provisions of Article 14 of the Constitution of india. Therefore, the duty, which was cast upon the Bank to exercise the power conferred upder Rule 72 of the Service Rules, was not exercised in accordance with law and in good faith. In our opinion, the premature retirement of the petitioner, amounting to termination, was in violation of rule 72 of the Service Rules and as such the impugned order Annexure F deserves to be quashed. ( 8 ) THE other objection of the learned counsel for the respondents, to be meted out, is that as there is an alternative remedy available to the petitioner, this Court cannot exercise the extraordinary powers under article 226 of the Constitution. Suffice it to say that when once the petition is admitted for hearing, it cannot be dismissed simply on the ground of alternative remedy available [ See Ishwari Prasad Gupta v. State of M. P. , 1986 MPLJ 698 ; and Board of Directors of Shri Ganesh Sahakari Vipnan (Marketing) Santha Maryadit and another v. Deputy Registrar, Co-operative societies, 1981 JLJ 774 ]. Moreover, the facts as placed by the respective parties, are not in dispute and the matter has to be judged in the background of the facts, as placed by the parties.
Moreover, the facts as placed by the respective parties, are not in dispute and the matter has to be judged in the background of the facts, as placed by the parties. On facts we have come to the conclusion that the petitioner, under Section 55 of the Act, cannot be directed to approach the Registrar, Co-operative Societies, to get his dispute decided inrespect of the illegal termination, where it takes a long time and even thereafter, appeal, second appeal, revision and a writ petition. In view of this situation, we are of the opinion that the impugned order (Annexure 'f') passed by the respondent-Bank prematurely retiring the petitioner from service, is illegal and has been passed in breach of its duties and powers as conferred under Rule 72 of the Service Rules. Hence, the said order annexure F is illegal and inoperative and is quashed ; and the petitioner will be deemed to be in continuous service with all his consequential and ancillary benefits. ( 9 ) IN the result, this petition is allowed with costs and the impugned order (Annexure 'f') dated 23-8-1988 passed by the respondent Bank, is quashed. The petitioner shall be reinstated in service with all consequential and ancillary benefits. Counsel's fees Rs. 500/- (Five Hundred), if already certified. The outstanding amount of security deposit, if any, be refunded to the petitioner, after verification. Petition allowed. .